A Burmese court has turned down Aung San Suu Kyi's appeal against her most recent sentence to house arrest, her lawyer said today.

The pro-democracy leader was convicted and sentenced in August for briefly sheltering an uninvited American at her home earlier this year.

The verdict – which means she will be unable to participate in elections scheduled to take place next year – drew international condemnation of the military regime.

In her appeal, Aung San Suu Kyi argued that the conviction was unwarranted, but the Yangon division court ruled against her, Nyan Win said.

The lawyer said her legal team would file a new appeal to the supreme court within 60 days, and that today's proceedings had opened up a new possibility for the defence team's arguments.

He said the court had accepted the argument that the 1974 constitution under which she had been charged was null and void, but said the provisions of the 1975 security law under which she has been kept under house arrest remained in force.

"I think there is a window open over there. They have opened a window," Nyan Win said.

Aung San Suu Kyi, who has been detained for about 14 of the last 20 years, was sentenced to another 18 months for sheltering John Yettaw, who swam to her island home uninvited.

Yettaw later said he wanted to warn the Nobel peace prize winner that he had a "vision" she would be assassinated.

He was sentenced to seven years, but released on humanitarian grounds and deported less than a week after the verdict.

Today's ruling came after the US last week said it was modifying its tough policy of seeking only to isolate Burma's military regime and would instead try to engage it through diplomacy.

Washington said it would not give up its political and economic sanctions against the regime.

It and other western nations apply sanctions because of Burma's poor human rights record and failure to turn over power to Aung San Suu Kyi's National League for Democracy after it won elections in 1990.

The 64-year-old pro-democracy leader suggested last week in a letter to the military junta leader, General Than Shwe, that she was willing to cooperate with it to get the sanctions lifted, according to a statement from her party.

She had previously welcomed sanctions as a way of putting pressure on the junta to achieve political reconciliation with pro-democracy campaigners.

The pro-democracy movement has insisted on concessions from the junta if the two are to work together, particularly the freeing of political prisoners and the reopening of party offices.